Flying wheel strategy is a solid strategy with medium risk and high reward. You will enjoy a stable daily profits of 0.5%~1% if you can afford the risk of buying underlying asset at the current price.
Contents
What is Flying Wheel Strategy?
This strategy was first designed and introduced by Pionex. Proper use of this strategy can help users gain more than 15% in one month. The main idea is to first buy low using either Buy-the-Dip or Sideways Gain (invest stablecoin), then sell high using Covered Gain.
There are two ways for you to use Flying Wheel Strategy at Pionex. Either you can use the flying wheel strategy bot on our App, or you can manually buy crypto using Sideways Gain and sell them using Covered Gain on our website.
App Version (Automatically Invest with a Bot)
Here is an ongoing order of Flying Wheel Strategy on the App. Within 2 weeks, we earned 25.3 USDT (5% more than 150% APY) with a 500 USDT investment. The bot automatically invests for us using Buy-the-Dip to buy crypto at a low price and Covered Gain to sell crypto while earning passive yield. In this case, we set the target buy price of BTC at $16,500 and will sell it at $16,500 after successfully buying it.
The total profit shown in the graph is the net earnings we have had since we start the bot. The arbitrage profit tells us the amount we earn from yield and the price difference between buying and selling. The holding profit shows the PnL when you are staking crypto until it reaches the target sell price.
Website Version (Manually Invest)
Here is an example of winning 51.36 USDT (2.5%) from 2,000 USDT in a week using this strategy. It combines Sideways Gain (invest stablecoin) and Covered Gain to buy low and sell high while earning passive yield.
In the above graphs, we can see that [Sideways Gain Invest Stablecoin] was subscribed on 2022/09/01, and it got auto-reinvested for two rounds on 2022/09/01 and 2022/09/02 at 16:00. On 2022/09/03 at 16:00, the price of BTC drops below the target buy price, so 0.1011 BTC was bought with original investment and earned interest.
Then after BTC was bought, we subscribed to BTC Covered Gain with a target price the same as the previous strike price of Sideways Gain on 2022/09/03 at 16:29. The graphs above showed that this bot auto-reinvested for 6 rounds until the holding BTC and earned interest are sold at the target sell price on 2022/09/09 at 16:00.
Please note that all settlement times are in (GMT+8).
As we can see, Flying Wheel Strategy starts with investing USDT and ends with earning USDT. It started from Buy-the-Dip or Sideways Gain(Invest stablecoin) to earn daily interest in USDT until BTC is bought at the strike price (price drops below the strike price at settlement). Then reinvested BTC into Covered Gain and earned interests until invested BTC was sold at the buy price (the price we buy BTC).
- Buy-the-Dip lets you input your target buy price to buy crypto while earning passive income. There will be many products to choose from with different settlement dates and APY. You can select the one that fits your investment goal.
- Sideways Gain can generate 0.5%~1% return daily by setting the APY range from 180% ~ 360% until you buy crypto at the strike price. The strike price is set based on your filled target APY.
- Covered Gain can generate profit until the price of crypto bounce back to your target sell price. (we set the target sell price to be the buy price we swapped USDT for BTC, this way we earn the passive yield)
- If Buy-the-Dip or Sideways Gain ends up at a buy price of 20,000, we can create a Covered Gain bot at a target sell price of 20,000 to earn interest.
- We could also set the target sell price for Covered Gain to be higher than the buy price to earn the price increase, but it may take longer for the price to rise. Just keep in mind we should buy low and sell high.
The Steps to Create Flying Wheel Strategy
App Version: Use the Flying Wheel Strategy Bot
- Sign in to your account on Pionex App.
- Tap “Earn” on the bottom bar tools
- Tap “Structured” button on the top bar tools
- Tap the “+ Invest” button on the bottom-right side
- There is [Flying Wheel Strategy]
Basic Mode
Step 1: Fill in the Parameters
Choose the crypto you want and the target buy price. There are two options for setting up the target sell price. You can either toggle [Sell at Buy Price] to earn the yield or toggle [Sell at Buy Price] off to set your own sell price if you think the price will be higher.
- Choose the crypto you would like to invest in
- Enter the target buy price for the crypto you selected
- Determine the target sell price
Step 2: Select the Buy-the-Dip product you like and read through the rules for investment
Keep in mind that the APY will be higher with a closer buy price to the current price.
Step 3: Enter the investment amount
After entering the investment amount, you will see the return in two different scenarios. Also, you can customize auto-staking parameters for the bot to search for new buy-the-dip products if you did not buy BTC after the first round. The final product Pionex selects for you will be the one that best fits your auto-staking preference.
Lowest Tolerance APY: The lowest APY you expect to earn with the product
Longest period: The longest product settlement period you would prefer.
Make sure everything is as you expect, and you can just click on confirm and wait for your profit.
Pro mode
You will buy low and sell high with your expected percentage price drop and risk
Step 1: Fill in the Parameters
- Enter the crypto you would like to invest in
- Enter the percentage price drop. The percentage price drop is the percentage you think the crypto will drop in the future.
- Pionex will find the product that has a strike price closest to the price after a 5% drop, which is the current price*(1-percentage price drop)
- You can choose whether to sell the crypto at the buy price(strike price) or other prices. You can enter the percentage price rise in the future at which you would like to sell your holdings.
Step 2: Enter Investment Amount
- Enter the amount of USDT you would like to invest in this product, and the system will calculate your returns in two scenarios based on your investment amount.
- Auto-staking: further parameters for you to fill in. These would be constraints for filtering new products if you did not buy crypto in the previous round. The system will find the best fit based on your entered parameters.
Lowest tolerance APY: The lowest APY you expect with the product for the next round
Longest period: The longest settlement period you can tolerate.
Make sure everything is as you expect, and you can just click on confirm and wait for your profit.
Website Version: Use the Combo of Sideways Gain (Invest Stablecoin) and Covered Gain
- Sign in to your account on pionex.com.
- Tap the “Earn” -> “Structured” button on the top bar tools
- Tap the “Auto-invest” button on the left-hand side
- There are [Sideways gain(invest stablecoin)] and [Covered gain] at the bottom of the page.
Step 1: Create Sideways Gain (Invest Stablecoin) Bot
If you are unfamiliar with Sideways Gain, you can visit this page for a detailed tutorial.
Sideways Gain Step 1: Fill in the parameters for Sideways Gain
Structured: Stablecoin-Crypto pair; You will invest stablecoin to buy crypto. stablecoin-BTC and stablecoin-ETH are the most popular ones on our platform.
Investment: Amount of selected stablecoin you want to invest. You can also use the sliding bar to fill in the investment amount.
Auto-Invest Strategy: Fill in Target APY. You can earn your target yield at our recommended strike price.
APY higher limit, APY lower limit: the range of APY you expect, Pionex will find the best product with APY falls between the lower and upper limits.
Please note that the higher APY you set, the closer the buy price is to the current price. As the graphs show below, the closer buy price, $16,500, has a higher APY, but it also means higher risk. If the price drops to $16,250 at settlement, we will spend $250 more to buy crypto at $16,500. Please be clear with your goal and risk when setting up the target APY.
Step 2: Create Covered Gain Bot After Sideways Gain Order Gets Exercised
If you are unfamiliar with Covered Gain, you can visit this page for a detailed tutorial.
- Log in to your account at pionex.com
- Find the “Earn” -> “Structured” button on the top bar tools
- Find the “Auto-invest” button on the left-hand side
- There is [Covered Gain] at the center of the page.
- Click on “Create the bot” and follow the instruction below
Covered Gain Step 1: Fill in the parameters for Covered Gain
- Select the crypto you bought with Sideways Gain. Here in the graph, we choose BTC.
- Sell Price: the price you bought the crypto with Sideways Gain.
- Investment: the number of cryptos you bought with Sideways Gain.
- Lowest Acceptance APY: your lowest expected APY. We will find products that have higher APY than your lowest expectation.
- Longest Tolerance Settlement Period: the longest settlement period you would tolerate to wait for the expiration.
After filling out all those parameters, click next.
Covered Gain Step 2: Select the product you would like to invest
Tips:
- Suppose you bought BTC at 20,000. Then you should only look at products with a strike price higher than $20,000
- The shorter the settlement period, the better. If the price risk back fast, you can earn your stablecoin back sooner than a longer settlement period.
- On the bottom left of this page, by toggling Auto-reinvest, you can choose whether you want us to keep reinvesting for you until it gets exercised (successfully sell crypto).
Select the product you would like to subscribe to, and you just need to wait for your Covered Gain to be exercised!
Benefits and Risks
Benefits: With Flying Wheel Strategy, you can keep earning stablecoin with 0.5% – 1% daily return. It is a good strategy to be used in the long term if you believe in cryptos.
Risk: Prices may drop after you swap for cryptos using Sideways Gain. If this is the case, you may not be able to earn back your investment in a short period.
FAQ
Q： What should I do if I bought crypto with Sideways Gain, but the price kept dropping?
A： Don’t Panic. Give yourself an acceptable bottom price, and make sure you are comfortable with the strike price of Sideways Gain. With all of these, if the price kept going down, you would be confident holding them and waiting for the price to bounce.
Q： Should I set the target sell price of Covered Gain the same as the strike price of Sideways Gain?
A： Yes, setting the target sell price the same as the strike price of Sideways Gain is safer. There is a higher probability that your covered gain gets exercised. However, it is always your choice to choose a higher sell price for covered gain if you think the price of crypto will be much higher.
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